Common shares outstanding plus shares underlying stock-based awards
totaled 469 million on September 30, 2011, compared with 465 million a
year ago.

Net sales increased 44% to $10.88 billion in the third quarter, compared
with $7.56 billion in third quarter 2010. Excluding the $371 million
favorable impact from year-over-year changes in foreign exchange rates
throughout the quarter, net sales would have grown 39% compared with
third quarter 2010.

Operating income was $79 million in the third quarter, compared with
$268 million in third quarter 2010. The favorable impact from
year-over-year changes in foreign exchange rates throughout the quarter
on operating income was $14 million.

Net income decreased 73% to $63 million in the third quarter, or $0.14
per diluted share, compared with net income of $231 million, or $0.51
per diluted share, in third quarter 2010.

“September 28th was the biggest order day ever for Kindle, even bigger
than previous holiday peak days – we introduced Kindle Fire for $199,
Kindle Touch 3G for $149, Kindle Touch for $99, and our all new Kindle
for only $79,” said Jeff Bezos, founder and CEO of Amazon.com. “In the
three weeks since launch, orders for electronic ink Kindles are double
the previous launch. And based on what we're seeing with Kindle Fire
pre-orders, we're increasing capacity and building millions more than
we'd already planned.”

Highlights

Amazon announced the Kindle Fire, a new class of Kindle for movies, TV
shows, music, books, magazines, apps, games, and web browsing with all
the content, free storage in the Amazon Cloud, Whispersync, vibrant
color touch screen, a powerful dual-core processor, and “Amazon Silk”
– Amazon’s new revolutionary web browser that accelerates the power of
the mobile device by using the computing speed and power of the Amazon
Web Services Cloud. Kindle Fire is only $199.

Amazon announced three all-new Kindle e-readers that are smaller,
lighter, and more affordable than ever before. The $79 latest
generation Kindle is for customers who want the lightest, most compact
Kindle at an incredible price. The $99 Kindle Touch includes an
easy-to-use touch screen. Kindle Touch 3G is the top of the line
e-reader with the unparalleled convenience of free 3G where customers
never have to hunt or pay for a Wi-Fi hotspot – you simply download
and read books anytime and anywhere – all for $149. Each of these
e-readers includes all the benefits of the most advanced electronic
ink display that reads like real paper, even in bright sunlight.

Amazon.fr launched the French Kindle Store offering customers a vast
selection of over 35,000 French-language Kindle books. Amazon also
announced that its series of free “Buy Once, Read Everywhere” apps for
the most popular devices, including iPad, iPod touch, iPhone, PCs,
Macs and Android-based devices, are now available in French-language
versions. In addition, Amazon announced that the all-new Kindle with
French navigation is available at Amazon.fr for only 99€.

Amazon.com announced licensing agreements with Twentieth Century Fox
and PBS that allow the millions of Amazon Prime members to instantly
stream a broad selection of popular movies and TV shows from their
vast libraries. These deals will bring the total number of Prime
instant videos to more than 12,000 movies and TV shows from partners
such as CBS, FOX, PBS, NBCUniversal, Sony, Warner Bros., and many more.

Amazon Publishing released 61 titles in the quarter, including Kindle
bestsellers “The Detachment” by Barry Eisler, “Dove Season” by Johnny
Shaw, and “A Small Fortune” by Audrey Braun. Recent acquisitions
include Tim Ferriss’ “The 4-Hour Chef,” Penny Marshall’s memoir “My
Mother Was Nuts,” and the epic Foreworld Series project led by Neal
Stephenson and Greg Bear. Amazon Publishing also announced a new
imprint, 47North, which is dedicated to science-fiction, fantasy, and
horror. 47North joins sister imprints AmazonEncore, AmazonCrossing,
Powered by Amazon, Montlake Romance, and Thomas & Mercer.

The Company launched Amazon.es, a Spanish-language website offering
customers a vast selection of books, DVDs, video games, music, and
consumer electronics at everyday low prices. Amazon.es’s convenient
services include Amazon Premium, the local version of Amazon Prime,
with unlimited free guaranteed 2-3 day delivery for an annual fee of
14.95€. The first product sold on Amazon.es was a Blu-ray pack of
“Star Wars: The Complete Saga” to a new Premium customer in Madrid.

North America segment sales, representing the Company’s U.S. and
Canadian sites, were $5.93 billion, up 44% from third quarter 2010.

Worldwide Electronics and Other General Merchandise sales grew 59% to
$6.32 billion. Excluding the favorable impact from year-over-year
changes in foreign exchange rates throughout the quarter, sales grew
54%.

Amazon Web Services (AWS) announced new features to make it even
easier for enterprise customers to utilize the AWS infrastructure. New
services like Direct Connect, Identity and Access Management, and
Virtual Private Clouds allow enterprises to reliably, securely, and
cost effectively use the existing AWS infrastructure for their
computing needs.

AWS launched GovCloud, a new AWS Region designed to allow U.S.
government agencies and contractors to move more sensitive workloads
into the cloud by addressing their specific regulatory and compliance
requirements. AWS also announced it has received Federal Information
Security Management Act (FISMA) Moderate Authorization and
Accreditation from the U.S. General Services Administration.

Financial Guidance

The following forward-looking statements reflect Amazon.com’s
expectations as of October 25, 2011. Our results are inherently
unpredictable and may be materially affected by many factors, such as
fluctuations in foreign exchange rates, changes in global economic
conditions and consumer spending, world events, the rate of growth of
the Internet and online commerce and the various factors detailed below.

Fourth Quarter 2011 Guidance

Net sales are expected to be between $16.45 billion and $18.65
billion, or to grow between 27% and 44% compared with fourth quarter
2010.

Operating income (loss) is expected to be between $(200) million and
$250 million, or between 142% decline and 47% decline compared with
fourth quarter 2010.

This guidance includes approximately $200 million for stock-based
compensation and amortization of intangible assets, and it assumes,
among other things, that no additional business acquisitions or
investments are concluded and that there are no further revisions to
stock-based compensation estimates.

A conference call will be webcast live today at 2 p.m. PT/5 p.m. ET, and
will be available for at least three months at www.amazon.com/ir.
This call will contain forward-looking statements and other material
information regarding the Company’s financial and operating results.

These forward-looking statements are inherently difficult to predict.
Actual results could differ materially for a variety of reasons,
including, in addition to the factors discussed above, the amount that
Amazon.com invests in new business opportunities and the timing of those
investments, the mix of products sold to customers, the mix of net sales
derived from products as compared with services, the extent to which we
owe income taxes, competition, management of growth, potential
fluctuations in operating results, international growth and expansion,
the outcomes of legal proceedings and claims, fulfillment center
optimization, risks of inventory management, seasonality, the degree to
which the Company enters into, maintains and develops commercial
agreements, acquisitions and strategic transactions, and risks of
fulfillment throughput and productivity. Other risks and uncertainties
include, among others, risks related to new products, services and
technologies, system interruptions, government regulation and taxation,
payments and fraud. In addition, the current global economic climate
amplifies many of these risks. More information about factors that
potentially could affect Amazon.com’s financial results is included in
Amazon.com’s filings with the Securities and Exchange Commission
(“SEC”), including its most recent Annual Report on Form 10-K and
subsequent filings.

Our investor relations website is www.amazon.com/ir
and we encourage investors to use it as a way of easily finding
information about us. We promptly make available on this website, free
of charge, the reports that we file or furnish with the SEC, corporate
governance information (including our Code of Business Conduct and
Ethics), and select press releases and social media postings.

About Amazon.com

Amazon.com, Inc. (NASDAQ:AMZN), a Fortune 500 company based in Seattle,
opened on the World Wide Web in July 1995 and today offers Earth’s
Biggest Selection. Amazon.com, Inc. seeks to be Earth’s most
customer-centric company, where customers can find and discover anything
they might want to buy online, and endeavors to offer its customers the
lowest possible prices. Amazon.com and other sellers offer millions of
unique new, refurbished and used items in categories such as Books;
Movies, Music & Games; Digital Downloads; Electronics & Computers; Home
& Garden; Toys, Kids & Baby; Grocery; Apparel, Shoes & Jewelry; Health &
Beauty; Sports & Outdoors; and Tools, Auto & Industrial. Amazon Web
Services provides Amazon’s developer customers with access to
in-the-cloud infrastructure services based on Amazon’s own back-end
technology platform, which developers can use to enable virtually any
type of business. The new latest generation Kindle is the lightest, most
compact Kindle ever and features the same 6-inch, most advanced
electronic ink display that reads like real paper even in bright
sunlight. Kindle Touch is a new addition to the Kindle family with an
easy-to-use touch screen that makes it easier than ever to turn pages,
search, shop, and take notes – still with all the benefits of the most
advanced electronic ink display. Kindle Touch 3G is the top of the line
e-reader and offers the same new design and features of Kindle Touch,
with the unparalleled added convenience of free 3G. Kindle Fire is the
Kindle for movies, TV shows, music, books, magazines, apps, games and
web browsing with all the content, free storage in the Amazon Cloud,
Whispersync, Amazon Silk (Amazon’s new revolutionary cloud-accelerated
web browser), vibrant color touch screen, and powerful dual-core
processor.

References to customers mean customer accounts, which are unique
e-mail addresses, established either when a customer places an order
or when a customer orders from other sellers on our websites. Customer
accounts exclude certain customers, including customers associated
with certain of our acquisitions, Amazon Enterprise Solutions program
customers, Amazon.com Payments customers, Amazon Web Services
customers, and the customers of select companies with whom we have a
technology alliance or marketing and promotional relationship.
Customers are considered active when they have placed an order during
the preceding twelve-month period.

Seller Accounts

References to sellers means seller accounts, which are established
when a seller receives an order from a customer account. Seller
accounts exclude Amazon Enterprise Solutions sellers. Sellers are
considered active when they have received an order from a customer
during the preceding twelve-month period.

Registered Developers

References to registered developers mean cumulative registered
developer accounts, which are established when potential developers
enroll with Amazon Web Services and receive a developer access key.